No More Military Contractors?; The Dwight Schrute Effect
BY Nitasha Tiku
Bad news about military contracts.The Washington Post and Biz Box have the scoop: Defense Secretary Robert Gates just released the Pentagon's annual budget, and he plans to replace contractors will full-time civil servants. Despite the popular image of big business supplying the DoD, there've been a lot of small firms that, over the years, have come to depend on these types of contracts. So even as opportunities are growing in some sectors—electronic medical records, smart grid technology, alternative energy—they're shrinking in others.
The Dwight Schrute effect. Say that new hire at your office isn't a like-minded employee who fits in seamlessly with your company culture—instead, he's more of an outsider, like Dwight Schrute from The Office. Beet farming trivia aside, his presence could benefit your team as a whole. Brigham Young University professor Katie Lijenquist tells The Globe and Mail that the tension created by introducing "socially distinct newcomers" can be critical in diverging from the same ole groupthink. If the odd man out presents an idea and one of the other staffers agrees, the group will disregard the perceived threat to the social cohesiveness and sharpen their focus on the task at hand, opening up the room up to new ideas. Experts say at a time when employees are trying to blend to keep their jobs, managers should be actively trying to make their teams more diverse.
Bay area VCs slightly more confident. The WSJ's Digits blog has a report on the latest stats from the University of San Francisco's Venture Capitalist Index. Survey results from the last five quarters have revealed increasing pessimism among VCs, a five-year low. The latest results, however, increased a smidgeon. Respondents were asked to rank the Bay Area conditions on a five-point scale — the index rose to 3.03 from 2.77 last quarter. "On the one hand it's like a Roach Motel: there's no exit market, so money comes in but can't get out," said Shomit Ghose, of Onset Ventures, according to the USF report. "On the other hand, innovation and entrepreneurship continue to barrel along in sixth gear: there're a lot of disruptive investing opportunities out there."
Cable's pay-per-byte plan for metered broadband gets shut down in Congress. Time Warner Cable started to experiment with broadband "caps" in Corning, New York. Unfortunately for the cable giant, Corning is also the hometown of New York Rep. Eric Massa, who was none too pleased. Says Massa: "Just at a time when access to information is driving our economic recovery, Time Warner is moving to stagnate the 21st Century technology needed to rebuild America." MediaMemo's Peter Kafka says any of the big Internet pipe players trying to manage the boom in Web video by charging on a per-use basis can expect similar resistance from lawmakers, who support consumers perceived right to use as much data as they want. Adds Kafka: "The cynics among us think the plan is designed to discourage people from ditching their cable TV service in favor of Netflix, on-demand, Hulu and TV downloads from Apple's iTunes."
Another reason to update the electrical grid. In further news of technology infrastructure woes, The Wall Street Journal reports cyberspies have penetrated the US power grid and left behind programs that, in a time of war, could be used to damage the system. The incident is a pretty good advertisement for making some serious upgrades. For more on the grid and the entrepreneurs who are working to improve it, see Inc.'s coverage of the stimulus bill.
The wizard of Woz. At the Amex OPEN forum, Guy Kawasaki has a nice summary of Steve Wozniak's new bookWoz. Before landing on Dancing with the Stars, Wozniak, of course, co-founded Apple and helped launch the personal computer revolution. His advice to engineers, it turns out, is quite applicable to entrepreneurs: "Don't waiver. See things in gray-scale. Work alone. Trust your instincts."
How do the energy-related tax incentives in the stimulus package benefit small businesses? The WSJ's Kelly Spors answers a reader's question about energy tax breaks that could trickle down to small businesses from the $3.1 billion allotted to state governments and $3.2 billion for local governments. The news is good if you're making green upgrades. Lowell Ungar, a policy director for a Washington coalition that promotes energy efficiency, says the money will be distributed differently in different areas, but it will likely be used to sweeten programs that already offer tax breaks to businesses to make energy upgrades and install renewable energy, as well as to expand revolving-loan programs that give low-cost loans to pay for energy upgrades and renewable energy projects. Dsireusa.org and energytaxincentives.org are two good sites for keeping track of initiatives and incentives. You might also want to consider a free or low-cost energy audit, which could help your company qualify for or find incentives in a particular area.
Small business owners "somewhat more" confident. According to an article on NASDAQ.com Discover's monthly confidence index for small business owners rose to 78.2 at the end of March, up from 71.9 in February. Of course, the good news comes with qualifications: only 16 percent surveyed think the economy is getting better, but even that was a step up from 12 percent in February.
Reporter NITASHA TIKU covers technology, finance, green business, and social entrepreneurship for Inc. magazine and contributes to the staff’s daily links blog. Her work has appeared in New York magazine, The Villager, Chelsea Now, and on nymag.com. She lives in Brooklyn, New York. @nitashatiku